ASX set to lift despite G7 uncertainty

10 June 2018 — 5:58pm

Australian shares look set for a positive start on Tuesday after Wall Street pulled off its third-straight week of gains on Friday despite ongoing tensions between the US and its G7 partners over trade.

However, with another trading day on world markets before the ASX opens following Monday's holiday - and the fallout from the G7 summit in Canada yet to be fully processed - this could change.

Australian share futures were trading 10 points higher on Sunday after the S&P 500 index rose 1.6 per cent and the Dow Jones Industrial Average climbed 2.8 per cent for the week, along with a rally in the price of gold and copper.

German Chancellor Angela Merkel, centre, speaks with U.S. President Donald Trump, seated at right, during the G7 Leaders Summit in La Malbaie, Quebec, Canada.Credit:AP

Locally, the benchmark S&P/ASX200 index closed down 12.1 points, or 0.2 per cent lower at 6,045.2, on Friday, with the broader All Ordinaries index also down 12.6 points, or 0.2 per cent weaker, at 6,156.8 points.

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AMP Capital chief economist Shane Oliver says he doesn't expect the outcome of the G7 summit to be positive following President Trump's late entrance, rants about the US being taken advantage of and early exit.

"It can't have been anything but a bit fractious because it's effectively become, in relation to the trade issue, a matter of the G6 versus the G1," Dr Oliver said on Sunday.

"And as long as there's this tension regarding trade, then that's probably going to be the way it remains.

On a brighter note, continuing strength in the global economy should negate the effect of the ongoing trade dispute, Dr Oliver said

Tuesday's Trump-Kim summit in Singapore isn't expected to affect markets greatly either but there is a swathe of meetings and economic data due in the week ahead that could.

Locally, Reserve Bank governor Philip Lowe will speak on Wednesday but it's the US Federal Reserve's policy meeting on the same day that looks set to have the greatest effect on markets.

The expected US interest rate rise will put further pressure on the Australian dollar, Dr Oliver said.

On the data front, Thursday's employment figures will be closely watched, with economists expecting a slight drop in the official rate and a gain of around 10,000 jobs.

Tuesday's National Australia Bank business confidence survey is expected to show conditions remain solid, however, Westpac's consumer confidence survey on Wednesday may reflect less positive sentiment among householders.

While April's housing finance figures, due for release on Tuesday, will also be closely watched following a tightening of lending standards by the banks regarding borrowers' income and expenses.